VW CEO Blume advocates for smarter solutions than plant closures

Threatened locations and their significance

Blume had already announced that production capacity would be reduced by one million to nine million vehicles per year by 2030. Given the difficult conditions, he spoke of a challenging environment: "Unser Umfeld war noch nie so anspruchsvoll und risikobehaftet wie heute. Geopolitische Spannungen, Handelsbarrieren, Regulatorik, Marktumbrüche und intensive Konkurrenz".

At the same time, the VW CEO pointed to positive business figures: "Wir sind klarer Marktführer in Europa – bei Verbrennern und vollelektrischen Fahrzeugen". The new entry-level family is performing particularly well: "Von unserer neuen Einstiegsfamilie um den ID. Polo haben wir über 50.000 Autos in den ersten vier Wochen verkauft".

On costs, Blume noted significant progress. "Einsparungen in deutschen Standorten schon Wirkung zeigten, und die Fabrikkosten allein im Vorjahr ‚um durchschnittlich 20 Prozent‘ gesunken seien". The reduction in factory costs at the German locations had decreased by an average of 20 percent in the previous year alone. Blume described this as "ein starker Fortschritt".

Savings program and model offensive

Despite this progress, the group is sticking to its savings targets. By 2030, 5,000 of 21,000 management positions worldwide are to be cut. The product portfolio will also be significantly reduced: "Die Zahl der Modelle soll bis 2035 um die Hälfte reduziert werden, um kostengünstiger und effizienter produzieren zu können".

In addition, the VW, Skoda, and Seat brands are to overlap less in the future, as their models currently compete with one another. This reorganization is also intended to help increase efficiency and reduce costs. In the interview, Blume had also hinted at conceivable alternatives to closures: defense companies could be housed at the at-risk locations, for example, or models developed in China could be manufactured there.

Outcome uncertain

With his statements, Blume responded to the debate about possible plant closures in Germany that has been simmering for months. The company is under considerable economic pressure due to weak demand for electric cars, pressure from Chinese manufacturers, and the ongoing transformation toward e-mobility. Employee representatives and politicians had recently urgently warned against redundancies and site closures.

It remains unclear how many of the more than 650,000 jobs at Volkswagen worldwide will actually be cut. Blume spoke of smart solutions beyond closures but did not fundamentally rule them out. The final decision on the fate of the four German plants is expected in the coming months.